Pound falls further as economy shrinks – Earlier this week I outlined some key UK data that was due today. The numbers were released at 09:30am this morning, and they were all worse than expected. The forecast wasn’t particularly good to start with. As the actual numbers were worse than expected, it’s pushed the Pound lower across the board.
Industrial Production was down -0.06%, Manufacturing down -0.2%, and Business Investment down -0.5%. The key release was Gross Domestic Product (GDP) which came in at -0.2%, showing that the economy is now in contraction. This has sent the GBP/EUR rate into the high €1.07’s, and the GBP/USD rate into the high $1.20’s.
No Confidence vote also hurting Sterling
Away from data, it is Brexit that continues to weigh on the value of Sterling. It’s looking more and more likely that when Parliament returns from recess in early September. If he loses the vote of no confidence, he could hold an election after the Brexit deadline and after we’ve left the EU. We might see Labour and the SNP try to form a government, but I don’t think this is likely. the markets would not react favourable should this be the case, and the Pound would sink even further.
Pound could continue to lose value
Talks of an election and an increasing chance of No Deal will likely continue to send the Pound lower. Things could get much worse for the Pound. Those that need to look at converting a large sum of Pounds to another currency, should take action now to explore their options. We offer exceptional exchange rates, and a free consultation over the phone with a currency expert. If you would like to discuss how we can help with your requirements, contact us today or drop me an email.
Have a good weekend.